Can the stock market have a peak?
In my opinion I feel we may see a peak in the stock market.From my own experience I know that cutting cost increases profit. But growing a business reduces profit but increase revenues and protects the future of the business.When things slowed we were quick to preserve cash, cut expenses, and minimize expansion. This caused our cash to go up and our profits to go up. Now we are spending money on more efficient software and will be buying hardware. We will spend money on increasing revenues without hiring more people. We are starting to advertise again and can let our margins drop some with the increase in revenues.The publicly traded companies have done the same with one difference. The publicly traded issued a lot of new shares.They used the shares to raise cash, to pay for services, to reward and pay officers.A 10% increase in shares issued is equal to a years net income. Some companies double there shares out.With the economy picking up expenses to expand and grab customers will go up. Paying back loans will be important. Buying back shares, new equipment, software and other things will hurt profits. In short if the slowing economy caused record profits, the acceding economy will cost companies in effort to dominated their field.Also considering that the baby boomers that started investing in the late 1970 and created a high volume bear market are now pulling money out. I would not be surprised if 2013 is a record high in the market. I don't mean just looking back but in the future.One ace in the hole is that the Obama administration are the masters of manipulation. They could run the market up if Obama has a chance of a 3rd term of if he is in the midst of campaigning for the change in the law. The manipulation may be focused on the Dow since it is easier to manipulate a few companies reports then the s&p 500.